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TMI Blog2017 (6) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... on surmise without any evidence. Thus the addition made by the AO is deleted and the orders of the lower authorities are set aside. This ground of the appeal is allowed. Addition made on the basis of seized books of accounts - Held that:- In the absence of any evidence to show that there was action u/s 132 of Income tax act in the assessee case and exercise has been made by the Revenue to prove that the incriminating material was belonged to the assessee with the relevant statements recorded u/s 132(4) or u/s 131 of the IT Act, we are of the considered view that that the presumption to hold that he books of accounts belonged to the assessee u/s 132(4A) of I.T. Act cannot be made applicable to the assessee. Further the AO also caused the enquiries in respect of the loans and advances stated to have been made to the parties and received replies denying the transactions. Therefore, we hold that the addition made on the basis of presumption u/s.132(4A) in the hands of the assessee cannot be sustained and deleted. Addition u/s 69 - credit in the bank of Rajasthan and estimated interest thereon - account not disclosed to the Department - Held that:- There was a peak credit balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest to the above parties. Even in re-assessment proceedings the A.O has not brought on record any evidence to prove that the assessee has made the payment of interest to the above creditors. In the absence of any evidence we are unable to sustain the additions made by the A.O, and accordingly the same is deleted. The orders of the lower authorities on this issue are set aside and the appeal of the assessee on this issue is allowed. Addition relating to the Repayment of Loans - Held that:- It is evident from the assessment order reproduced above that the above parties have denied the re-payment of the amounts to the assessee. Though the debts are outstanding in the names of the above persons, having denied transactions by the debtors burden is on the assessee to prove that the amounts had actually came to the account for re-payment of the above loans, failing which the cash credits appearing in the names of the debtors should be treated as unexplained and brought to tax which the A.O has exactly done in the assessment order and the CIT(A) has confirmed the order of the A.O. In the re-assessment proceedings also the assessee has not furnished any evidence to establish that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee could not produce the creditor. Therefore, the Ld.AR of the assessee argued that the interest as well as the principle amount of ₹ 10,000/-, representing the addition made by the AO should be deleted. The assessee also relied on the decision of this Tribunal in ITA No.2251/Mds/93 in assessee s own case. On the other hand, the Ld.DR relied on the order of the lower authorities. 4.0 We heard the rival submissions and perused the material placed before us. The assessee received a sum of Rs ₹ 10,000/- as a loan during the year under consideration and failed to produce any evidence regarding the genuineness of the cash credit and the identity of the creditor. It is a settled law that the assessee has to establish the genuineness, identity and credit worthiness of the creditor. The assessee has not placed any evidence regarding the identification, genuineness and creditworthiness of the creditor. Though the Tribunal remitted back the matter for furnishing the necessary evidence to establish the genuineness of the credit the assessee failed to establish the same. Therefore, there is no merit in the argument of the assessee that the loan is genuine. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) For the A.Y.1980-81 the addition of ₹ 1,32,000/- represent the advances made to various persons as per the seized note book and the amount of Rs. ₹ 20000/- was the interest estimated on the said advances. ii) For the A.Y .1982-83 the addition of ₹ 3,39,650/- arrived by the AO basing on the books found for F.Y.1982-83 recasting the trial balance for the F.Y.1981-82. The sum of ₹ 22,000/- was interest on advances ₹ 1,32,000/- assessed in 1980-81, and ₹ 45000/- was the estimated interest on advances of ₹ 3,39,650/- iii) For the A.Y .1983-84 the addition of ₹ 3,53,415/- arrived by the AO as per the books found for F.Y.1982-83 and ₹ 22,000/- was interest on advances of ₹ 1,32,000/- assessed in 1980-81 and ₹ 9415/- was the estimated interest on advances of ₹ 3,53,415/- iv) For the A.Y1984-85 the addition of ₹ 1,10,000/- was estimated interest on advances assessed as undisclosed income as per the seized material for the A.Y 1980-81, 82-83 and 83-84. 7.1 The above advances/entries were not found in the regular books of accounts of the assessee and the assessee has denied the books of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from her unexplained financial business activity. Since these credits and capital account were not reflected in her books of accounts, the AC estimated and amount of ₹ 45,000/-as interest income thereon. In view of the above, the action of the AD in adding back these two amounts to the income of the assessee, is confirmed. 7.3 Aggrieved by the order of the Ld.CIT(A), the assessee filed the appeal before this Tribunal. During the appeal, the Ld.AR argued that the search was conducted in the premises of Appellant s son and the warrant of authorization was also issued in the name of Appellant s son Shri NK. Mohnot. Neither any search and seizure action u/s 132 was conducted in her residential premises and nor any books of accounts /documents were seized from her premises, hence the presumption u/s132(4A) has no application in assessee s case. The note books purported to be seized from the premises of Mr. Mohnot does not belong to her and it were not in her hand writing. No statement was recorded from her at the time of search confronting the seized material found from her son s premises. The Ld. A.R further argued that the assessee is residing all along in Rajasthan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true ; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] Similarly, Sec.292(C) which is Parimateria of Sec.132(4A) in respect of presumptions of assets books of accounts, etc., reads as under: [Presumption as to assets, books of account, etc. 292C. 15[(1)] Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom shri N.K. Mohnot who was searched u/s 132 with regard to the contents of the note books and to confront the contents of the statement with the assessee and to draw inference. But no such exercise was done in this case. Therefore, in the absence of any evidence to show that there was action u/s132 of Income tax act in the assessee case and exercise has been made by the Revenue to prove that the incriminating material was belonged to the assessee with the relevant statements recorded u/s 132(4) or u/s 131 of the IT Act, we are of the considered view that that the presumption to hold that he books of accounts belonged to the assessee u/s 132(4A) of I.T. Act cannot be made applicable to the assessee. Further the AO also caused the enquiries in respect of the loans and advances stated to have been made to the parties and received replies denying the transactions. Therefore, we hold that the addition made on the basis of presumption u/s.132(4A) in the hands of the assessee cannot be sustained and deleted. This view is supported by the decision of Hon ble Delhi High court in the case of CIT v. Anil Khandelwal reported in 93 CCH 0042. Therefore the assessee s appeal on this ground for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45,000/- 15,000/- 05.10.81 55,000/- 5. Sri Omprakash Gupta 50,000/- 15.12.81 50,000/- Total 1,50,000/- 9.1 For the A.Y.1983-84 the AO has made the addition of (Rs.2,25,000/-+2,33,500/-) ₹ 4,58,500/- as unexplained cash credits in respect of the following creditors. Sk. Bhandari ₹ 1,00,000/- Kishore Kumar Jain ₹ 45,000/- Nirmal Kumar Jain ₹ 55,000/- Om Prakash Gupta ₹ 25,000/- Kesharimal Jhaverchand ₹ 1,50,000/- Prakash chand Sons ₹ 83,500/- ₹ 4,58,500/- The AO has given several opportunities to the assessee in the original assessment as well as in the re-assessment proceedings. But the assessee failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the relevant income tax returns were furnished after the search operation carried out by the Income Tax Department and the CBI. Therefore, the transactions pertaining to the present assessee reflected in their returns of income would not genuine and bonafide. Finally, after exhausting all the options, the AC requested the assessee to produce the sundry creditors in person before him. However, in spite of repeated reminders and opportunities, the assessee failed to comply with the same. From the perusal of the above facts, it is clearly revealed that the assessee was deliberately avoiding furnishing of information and, accordingly, he had failed to discharge the onus cast upon her. In view of this, I am of the considered opinion that the action resorted to by the AC was the most reasonable and bonafide under these circumstances. Hence, the action of the AO is confirmed. 9.3 The assessee filed appeal before us against the order of the CIT(A) and reiterated the submissions made before the lower authorities. On the other hand the Ld. DR supported the addition made by the AO. 9.4 We heard both the parties and perused the material placed on record with regard to the creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine the debtor. The documentary evidence was filed by the assessee to prove the advances made and re-payment received from the party and the same cannot be held as unexplained cash credits. On the other hand the Ld.DR supported the orders of the lower authorities. 10.2 We heard both the parties and perused the material placed on record. In the assessee s case, the assessment related to 1982-83 and the search was conducted in November, 1983. The case was remitted back to the file of the AO with a direction from this Tribunal to furnish all the necessary evidences to prove the case. From the Assessment Order, it is seen that the AO has given a number of opportunities to the assessee and the assessee has not produced the relevant evidences to prove the genuineness of the transaction. In this case, the amount of ₹ 10,000/- stated to be received from M/s.Balaji Plastics towards re-payment of the loan. The assessee also stated that Hundi Receipt signed by the buyer was furnished. But the party has denied the transaction, hence it is obligation on the part of the assessee to prove the transaction by producing the creditors. Both the authorities have stated that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .02.87, had categorically stated that they did not have any transaction with Mrs. Meenakumari Mohnot during the year 1983-84.The Manager of the concern produced the cash book and ledger relevant to this period and these were examined by the AC and no such transaction was found. The fact was already brought to the notice of the assessee long back. Similarly, other persons mentioned above, Filed letters dt. 10.02.87 and stated that only interest was paid by them and not the principal amount during the relevant period. 5. From the above, it was clear that the assessee did not actually recover the money as claimed by her but had only introduced her unaccounted money in the guise of repayment of loans by the said parties. In spite of several opportunities provided to the assessee, no evidence to substantiate the assessee s claim was furnished nor was any additional information furnished. Under these circumstances, the amount shown in the names of various debtors was treated as assessee s undisclosed income brought into books in the guise of repayments of loan and charged to tax. 12.1 Aggrieved by the order of the A.O, the assessee went on appeal before the CIT(A) and the Ld..CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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